Greece to shield banks from buyback lawsuits -finmin source

Reuters Staff

2 Min Read

ATHENS, Dec 7 (Reuters) - Greece aims to shield its banks from possible lawsuits linked to a crucial buyback of sovereign bonds and has no plans to extend the acceptance deadline for the scheme beyond Friday, a senior finance ministry official said.

A successful buyback is central to Greece's efforts to slash its debt. Greek banks will hold board meetings on Friday to decide whether they will join in and must declare their interest by 1700 GMT.

Greek lenders' participation is key for the success of the plan, under which Athens aims to spend 10 billion euros of borrowed money to buy back bonds far below their nominal value, cutting its debt by a net 20 billion euros.

Newspaper Kathimerini said there was a possibility the government would extend the deadline to early next week.

But the official, who spoke on condition of anonymity, played down the report.

"The process will close today and there is no need for an extension," he said.

The government would provide legal cover to protect the management of banks choosing to participate in the plan from possible lawsuits from shareholders who may suffer losses, the official said, without giving details.

Greek lenders hold an estimated 17 billion euros of bonds out of the 63 billion eligible for the buyback. They are expected to participate because they depend on the bailout funds Athens stands to receive once the buyback is completed.